Current Attempt in Progress Your answer is incorrect. Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division's net assets, including the goodwill, have a carrying amount of $800,000. The fair value of the division is estimated to be $750,000. Prepare Waters' journal entry, if necessary, to record impairment of the goodwill. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit

Current Attempt in Progress Your answer is incorrect. Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division's net assets, including the goodwill, have a carrying amount of $800,000. The fair value of the division is estimated to be $750,000. Prepare Waters' journal entry, if necessary, to record impairment of the goodwill. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 12PB: Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny...

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Farm Fresh Agriculture Company purchased Sunny Side Egg Distribution for $400,000 cash when Sunny Side had net assets worth $390,000. A. What is the amount of goodwill in this transaction? B. What is Farm Fresh Agriculture Companys journal entry to record the purchase of Sunny Side Egg Distribution? C. What journal entry should Farm Fresh Agriculture Company write when the company tests for impairment and determines that goodwill is worth $1,000 in the year following the purchase of Sunny Side?
On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an estimated life of 20 years and an estimated residual value of 20,000. The company has been depreciating the building using straight-line depreciation. At the beginning of 2020, the following independent situations occur: a. The company estimates that the building has a remaining life of 10 years (for a total of 16 years). b. The company changes to the sum-of-the-years-digits method. c. The company discovers that it had ignored the estimated residual value in the computation of the annual depreciation each year. Required: For each of the independent situations, prepare all journal entries related to the building for 2020. Ignore income taxes.
Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division’s net assets, including the goodwill, have a carrying amount of $800,000. The fair value of the division is estimated to be $1,000,000. Assume that the fair value of the division is estimated to be $750,000 and the implied goodwill is $350,000. Prepare Waters’ journal entry, if necessary, to record impairment of the goodwill.
Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division's net assets, including the goodwill, have a carrying amount of $800,000. The fair value of the division is estimated to be $1,000,000. Prepare Waters' journal entry, if necessary, to record impairment of the goodwill.
Sheffield Corporation purchased Sage Hill Company 3 years ago and at that time recorded goodwill of $460,000. The Sage Hill Division’s net assets, including the goodwill, have a carrying amount of $840,000. The fair value of the division is estimated to be $792,000.Prepare Sheffields' journal entry, if necessary, to record impairment of the goodwill.
Cheyenne Corporation purchased Sage Hill Company 3 years ago and at that time recorded goodwill of $320,000. The Sage Hill Division’s net assets, including the goodwill, have a carrying amount of $640,000. The fair value of the division is estimated to be $840,000.Prepare Cheyennes' journal entry, if necessary, to record impairment of the goodwill.
Waters Corporation purchased Johnson Company 3 years ago and at that time recorded goodwill of $400,000. The Johnson Division's net assets, including the goodwill, have a carrying amount of $800,000. The recoverable amount of the division is estimated to be $1,000,000. Prepare Waters' journal entry, if necessary, to record impairment of the goodwill.
Wilson Corporation is performing the test of impairment of its Technology reporting unit at the end of the year. Wilson has determined the fair value of the unit using a multiple of earnings approach at $2,000,000. The carrying value of the net assets of the Technology unit is $2,100,000. What should Wilson do with this information? a) Record an impairment loss of $100,000. b) Record no impairment loss. c) Perform step 2 of the test of impairment. d) Value goodwill individually.
On January 1, 2018, CRIMSON Company purchased machineries for P10,560,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no salvage value. On January 1, 2021, CRIMSON determined that the machineries had a useful life of six years from the date of acquisition and will have a salvage value of P960,000. An accounting change was made in 2021 to reflect these additional data. How much should be the balance of the accumulated depreciation for these machineries on December 31, 2021? A. ₱ 6,160,000 B. ₱ 6,400,000 C. ₱ 7,040,000 D. ₱ 5,840,000
Radio Corporation acquired End of the World Products on January 1, 2022 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2010, the End of the World Products Division had a fair value of $4,400,000. The net identifiable assets of the Division (excluding goodwill) had a fair value of $2,700,000 at that time. What amount of loss on impairment of goodwill should Twilight record in
Several years ago, Blaha Company purchased Husker Company as a subsidiary. At that time, Blaha recorded goodwill of $100,000 related to the purchase. Since that timethe company has not considered the goodwill to be impaired. However, at the end of 2019, Blaha decides to evaluate the goodwill for impairment because of technological changes in the industry. Husker (which is considered a reporting unit of Blaha) has a book value (including the goodwill) of $800,000. Blaha estimates that the fair value of Husker is $720,000, of which it allocates $660,000 to Husker, identifiable assets and liabilities. 1. Prepare the journal entry (if any) for Blaha to record the impairment of its goodwill at the end of 2019. 2. Next Level Would any additional impairment be required? 3. Assume that Blaha uses IFRS and has estimated the recoverable amount of Husker (which qualifies as a cash-generating-unit) to be…
Martinez Company owns equipment that cost $1,053,000 and has accumulated depreciation of $444,600. The expected future net cash flows from the use of the asset are expected to be $585,000. The fair value of the equipment is $468,000.Prepare the journal entry, if any, to record the impairment loss. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit